If labor and capital both exhibit increasing marginal products, then a production function cannot exhibit diminishing...

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If labor and capital both exhibit increasing marginal products, then a production function cannot exhibit diminishing...

If labor and capital both exhibit increasing marginal products, then a production function cannot exhibit diminishing marginal rate of technical substitution of labor for capital.

a. True
b. False

business economics

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Answer 1

Answer #1

The correct answer is (b.) False

Even if the production function exhibits increasing marginal products, then also it can have a diminishing marginal rate of technical substitution, as marginal rate of technical substitution is $\frac{Marginal Product of Labor}{Marginal Product of Capital}$

and is independent of the fact whether they are increasing or not.

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Answer 2

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If labor and capital both exhibit increasing marginal products, then a production function cannot exhibit diminishing...

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If labor and capital both exhibit increasing marginal products, then a production function cannot exhibit diminishing...

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If labor and capital both exhibit increasing marginal products, then a production function cannot exhibit diminishing...